Medicare Supplements are insurance policies that help pay some of the costs that are not covered by Original Medicare. Also, these policies can be helpful for people who have a lot of medical expenses, as they can provide additional coverage and peace of mind. In this blog post, we will discuss Buying A Medicare Supplement and if they are really worth it?
What is a Medigap Plan?
Medicare supplemental insurance plans cover the costs that you’re responsible for with Original Medicare. Also, these policies are offered by private insurance companies and are on top of your Part A and Part B benefits. Supplement insurance policies offer a predictable monthly expense versus the unknown cost of visiting a doctor or going into the hospital.
Original Medicare insurance policies are offered by the government to provide medical insurance for senior citizens through Part A and Part B policies. Unfortunately, these policies do not pay for all of the costs of covered medical services and supplies. Medicare supplemental insurance (aka Medigap insurance) fills in these gaps to help pay for some of the remaining health care costs.
Medigap insurance policies help pay for co-payments, co-insurance amounts, and deductibles. Additionally, some Medigap policies cover medical care when you travel outside the U.S. Traditional Medicare policies (Part A and Part B) do not cover international medical care.
Medicare Supplemental Insurance Exclusions
Some Medigap policies include prescription drug benefits as part of their plan. When a plan does not include prescription drug coverage, then you can buy a standalone Medicare Part D insurance policy.
Medicare supplemental insurance provides additional benefits and reduces your out-of-pocket expense for covered services. However, some services are excluded from these policies, including:
- Long-term care
- Vision care and eyeglasses
- Dental care
- Hearing aids
- Private-duty nursing
Medigap vs Medicare Advantage
No, these are two different options that seniors have for their healthcare needs. Medigap policies take care of the unpaid costs of Original Medicare. By comparison, Medicare Advantage policies are an alternative to Original Medicare and offer different levels of benefits that Medigap policies do not. Advantage Plans also help pay uncovered medical expenses that Original Medicare doesn’t.
With a Medigap policy, you’ll have multiple insurance policies and insurance cards for your care, but you can see any doctor that accepts Medicare. Medicare Advantage is more like insurance that you had during your working years. You pay one company for your insurance and many Advantage Plans include extra benefits like dental, vision, and prescription drug coverage. However, many Advantage plans require you to see “in-network” doctors and may not cover out-of-network care.
Cost of Medicare Supplement
Insurance companies often charge different premiums for the same Medicare Supplemental insurance policy. It pays to shop around to find the best price. Also, Medigap policies are standardized and must follow federal and state laws to offer the same basic benefits. Price strategies vary by state and are determined in one of three ways:
- Community-rated: The same price for everyone that has the same policy, no matter what your age is. Everyone in the state is treated the same.
- Issue-age-rated: Price is based on the age when you first buy the policy and will not increase as you get older. You’re rewarded for buying your policy at a young age and not changing your coverage.
- Attained-age-rated: Premiums are based on your age for the current year of coverage. Premiums start out lower for younger buyers, then increase as you get older.
The average cost of Medigap supplemental insurance depends on your age, where you live, if you use tobacco and which Medigap Plan you are purchasing.
Tips for Choosing
- Picking the right Medicare supplement insurance policy can be a challenge. Working with a insurance advisor can help you calculate those costs and plan accordingly with your retirement savings. Finding a qualified insurance advisor doesn’t have to be hard. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Medical insurance can be a significant expense in retirement. Understanding what those costs are will help you plan for these costs in your budget. Lastly, our specialist can help you figure out your projected income and expense in retirement.
Bottom Line
The cost of Medicare supplement insurance policies can vary significantly. It’s important to compare prices and benefits before you purchase a policy. You may also want to consider working with a financial advisor to help you plan for the costs of medical care in retirement. A United Insurance agent can help you find a qualified program or plan.